The Retention Rate Illusion - Understanding the Relationship between Retention Rates and the Strength of Subscription-Based Businesses

13 Pages Posted: 10 Jul 2020 Last revised: 17 Nov 2020

Date Written: October 11, 2020

Abstract

This article discusses five important pitfalls when using customer-centric metrics and offers suggestions
for adjustment to these metrics in order to make them more useful for various stakeholders. Furthermore,
the article introduces an innovative framework that uses multiple customer-centric metrics to assess the
strength of a subscription-based business model.

Keywords: Retention Rate, Renewal Rate, Churn, NPS, Net Promotor Score, Subscription, Business Models, SaaS

JEL Classification: g11, m21, m31

Suggested Citation

Wierckx, Patrick J., The Retention Rate Illusion - Understanding the Relationship between Retention Rates and the Strength of Subscription-Based Businesses (October 11, 2020). Available at SSRN: https://ssrn.com/abstract=3629281 or http://dx.doi.org/10.2139/ssrn.3629281

Patrick J. Wierckx (Contact Author)

Independent ( email )

No Address Available
Netherlands

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